Almarai upgraded to ‘neutral’ on solid Q3 results; TP raised to SAR 85

Alistithmar Capital has upgraded Almarai Co. to “neutral” from “underweight” and raised its target price to SAR 85 from SAR 80.7 on the back of solid Q3-2015 results which fell in line with its estimates.

Last week, Saudi Arabia’s top dairy company reported a net profit of SAR 595.1 million for the quarter, marking a year-on-year (YOY ) increase of over ten percent.

The brokerage firm said it expects the company to boost its production capacity in the future, which should result in improved sales growth across its poultry and fodder units.

It added that an increase in dividends was not likely, but the company could instead increase its capital through the distribution of bonus shares.

Almarai’s net profit is seen to reach SAR 1.97 billion for the 2015 fiscal year, which would mark an increase of 17.8 percent when compared to 2014.